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In: Accounting

Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria....

Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow:

Proportion of Services Used By
Department Direct Costs Maintenance Cafeteria Machining Assembly
Machining    101,000.00
Assembly      68,400.00
Maintenance      42,400.00 0 0.2 0.6 0.2
Cafeteria      34,000.00 0.6 0 0.2 0.2

1)

Compute the allocation of service department costs to producing departments using the direct method. (Do not round intermediate calculations.)

Machining

Assembly

2) Assume that both Machining and Assembly work on just two jobs during the month of August: CM-22 and CM-23. Costs are allocated to jobs based on machine-hours in Machining and labor-hours in Assembly. The number of labor- and machine-hours worked in each department are as follows:

Machining Assembly
Job CM-22: Machine-hours 180 40
Labor-hours 50 20
Job CM-23: Machine-hours 40 20
Labor-hours 30 240

How much of the service department costs allocated to Machining and Assembly in the direct method should be allocated to Job CM-22? How much should be allocated to Job CM-23? (Round "Department rate" to 2 decimal places.)
CM-22 CM-23

Machining:

Assembly:

Solutions

Expert Solution

ekkarill92 answered 10 months ago
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